PolitiCal
On politics in the Golden State
February 3, 2012 | 11:28 am

Gov. Jerry Brown has courted a coalition of business and labor groups to back his November initiative that would raise taxes on sales and upper incomes. Now, some on the left are lashing out at the governor’s plan, and his early donors, reaffirming their intent to place a competing tax measure on the ballot this fall.

The governor has said repeatedly he wants his initiative to be the only tax-increase proposal before voters in November. But thus far, he has been unable to get some of his fellow Democrats to step aside.

Civil rights attorney Molly Munger continues to fund her proposal to hike income taxes across the board to raise more money for schools. Another initiative backed by the California Federation of Teachers, which would raise taxes on upper incomes exclusively, received new public backing from the California Nurses Assn. this week, and backers of that plan blasted Brown’s proposal in an email to supporters.

To read entire story, click here.

Capitol Alert
The latest on California politics and government
February 2, 2012

A “millionaires tax” initiative spearheaded by the California Federation of Teachers and the Courage Campaign received petition language today, as well as backing from the powerful California Nurses Association.

CFT spokesman Fred Glass said his group expects to begin collecting signatures Monday now that state Attorney General Kamala Harris has issued official petition language today. Harris titled the measure “Tax To Benefit Public Schools, Social Services, Public Safety, And Road Maintenance.”

The CFT/Courage plan would raise taxes by three percentage points on income above $1 million and five percentage points on income above $2 million. State fiscal analysts say the proposal would generate $4 billion to $6 billion annually, with a $6 billion to $9.5 billion windfall in the 2012-13 fiscal year because the plan would capture 18 months of taxes.

The plan is competing with Gov. Jerry Brown’s tax initiative, which would raise income taxes on earners starting at $250,000 for single filers, as well as increase the statewide sales tax by a half-cent.

To read entire story, click here.

Gov. Jerry Brown laid out a detailed plan to alter California’s state and local public retirement systems on Thursday – and immediately drew fire from his core labor constituency.

The details delivered to the Legislature on Thursday generally tracked with an outline he unveiled in October. Representatives of a union coalition hoped to negotiate what they consider a less severe package. On Thursday, they said they felt blindsided.

“To launch this bomb in the early stages of the legislative season can only be counterproductive,” said Steve Maviglio, spokesman for the union coalition Californians for Retirement Security. “The timing and severity of this was quite a surprise.”

Because the package of proposals amends the state constitution, it needs support from two-thirds of lawmakers in the Democrat-controlled Senate and Assembly to be put on the Nov. 6 ballot.

The centerpiece of Brown’s plan ends traditional pensions for state and local government employees hired July 1, 2013, and later. Employers would be offered “hybrid” plans that combine a smaller guaranteed payout with a more volatile 401(k)-type component.

“I think there’s a lot of really good stuff in the proposal,” said retired state Finance Director Mike Genest, who is now aligned with California Pension Reform, a group that is raising money for its own ballot measure.

While the unions and some experts have warned that hybrid pensions would devastate retiree security, Genest said that the idea is fair because “at least some of the risk is shared with the employee.”

Brown’s plan aims to replace 75 percent of an employee’s income assuming 30 years of service and a retirement age of 57 for public safety employees. Other workers would reach full retirement at 67 after serving 35 years.

To read entire story, click here.

Joe Nelson, Staff Writer
Posted: 02/01/2012 02:01:30 PM PST

The labor union representing roughly 11,000 San Bernardino County employees announced Wednesday it will support another union’s effort to reduce county supervisors’ jobs to part-time.

Paula Ready, president of the San Bernardino Public Employees Association (SBPEA), said in a statement that the union’s board of directors had voted unanimously to support the San Bernardino County Safety Employees Benefit Association (SEBA) in its push to slash county supervisor salaries to $60,000 a year and their district budgets from $1.5 million to $250,000.

The unions are accusing the board of foisting its duties onto county Chief Executive Officer Greg Devereaux and voters.

Though the board has cut its meeting schedule in half, it still reviews the same number of agenda items, only now more items are going on the agenda, county spokesman David Wert said.

He said the unions are aware of this and their arguments are ill-informed.

“The unions are close enough to the county’s operations to know those meetings are only a small portion of what board members do,” Wert said.

To read entire story, click here

BY IMRAN GHORI
STAFF WRITER
ighori@pe.com

Published: 31 January 2012 11:22 PM

An influential union that is backing a proposed ballot measure to reduce San Bernardino County supervisors’ positions to part-time has more than a half-million dollars in its political action committee fund, according to campaign finance reports released this week.

The San Bernardino County Safety Employees’ Benefit Association Local PAC, the campaign committee for the union representing about 3,100 county public safety employees, has $660,103 on hand, according to its report covering the period for the last six months of 2011.

Last week, SEBA announced that it would help fund a proposed ballot measure that would make supervisors’ positions part-time, cut their pay and benefits and reduce their annual staff budget from $6 million to $250,000.

The announcement came the same day the union criticized a proposed ballot measure introduced by Supervisor Janice Rutherford that would require that all future employee pension increases go before voters. SEBA also has been at odds with the county in contract negotiations in recent months where the county has asked union members to provide retirement and health benefit concessions.

To read entire story, click here.

Supervisors’ second-largest union argues it was asked to give up too much before terms were imposed; terms reached with biggest union

BY DUANE W. GANG AND DUG BEGLEY
STAFF WRITERS
dgang@pe.com | dbegley@pe.com

Published: 31 January 2012 09:15 AM

More than 1,000 Riverside County workers took to the streets Tuesday protesting benefit reductions and warning that additional strikes could be on the way if county officials don’t reopen contract negotiations.

The 24-hour work stoppage was expected to last until 6:59 a.m. today and marks the latest escalation between county management and the Service Employees International Union Local 721, the county’s second-largest employee group.

On Monday, the county and a state labor relations board went to court and successfully blocked 248 county nurses and other health care workers from taking part in the strike.

“We will take any job action necessary to get them to come back to the table,” said Wendy Thomas, the union’s chief negotiator and a Riverside County employee.

But while SEIU members picketed, the county reached a tentative new contract with its largest employee group, Laborers’ International Union of North America Local 777.

The laborers’ union represents about 7,000 employees. The four-year deal would start July 1 and provide $60 million in annual savings once fully implemented, according to a county statement.

Because the employees have yet to vote on the contract, the county did not release specifics, but it did say employees would pay 8 percent of their salaries toward their retirements.

“This is what happens when both sides sit down with realistic goals that honestly consider the county’s budget picture and the needs of our employees,” Board of Supervisors Chairman John Tavaglione said in a statement.

In the same statement, laborers’ union Business Manager Stephen Switzer said the agreement addresses the county’s budget woes in a meaningful way while valuing the employees and their work.

SEIU represents about 5,800 county workers ranging from clerks to social workers and nurses.

County officials said Tuesday they had no major problems conducting business, despite the strike. Managers filled in where needed, health clinics reduced appointments, and the county hospital canceled elective surgeries, officials said.

According to the county, 1,394 workers did not show up for work Tuesday. The most, 556, came from the Department of Public Social Services.

BIG TURNOUT

Wearing SEIU’s signature purple T-shirts and holding strike signs, the picketers started making their feelings known about 8 a.m. outside the County Administrative Center in downtown Riverside, where a regular meeting of county supervisors was scheduled. The crowd steadily grew.

By the time the supervisors opened their meeting at 9 a.m., SEIU members filled every available seat in the board’s chambers and swarmed into the lobby and atrium of the county building.

They chanted “fair contract now” and “Hey-hey, ho-ho, Bob Buster’s got to go,” referring to the supervisor who has been the board’s most vocal advocate for requiring employees to pay more toward their retirements.

Inside the board’s chambers, employees waved their hands in the air to show their displeasure with the county over the contract talks. Tavaglione warned the crowd that clapping and cheering was not allowed, but at one point, when Buster spoke, the room erupted in coughing.

Inside and out, the crowd peaked at more than 2,000. About 1,500 SEIU members and supporters later marched through downtown Riverside.

Some union members said they felt they had no choice but to join the picket line.

“I’ve seen some bad deliberations, but this is the worst,” said Linda East, 53, a policy writer for the county-operated CalWORKS program.

East said holding a picket sign is unfamiliar turf for her.

To read entire story, click here.

Riverside County officials have gone to court in an effort to stop a one-day strike by health care professionals.

BY RICHARD K. De ATLEY
STAFF WRITER
rdeatley@pe.com

Published: 30 January 2012 11:33 AM

A judge Monday barred 248 health-care workers from joining a one-day strike by members of Riverside County’s second-largest union.

After a daylong hearing, Judge John Vineyard issued a temporary restraining order against all but 17 members of a group of 265 workers whose jobs the county argued were vital. Vineyard ordered the majority not to take part in the one-day walkout by members of Service Employees International Union Local 721.

The SEIU local represents 5,800 county workers. It is not certain how many will strike today, but union officials have said they expect thousands to take part in the protests in front of the County Administrative Center on Lemon Street in Riverside.

Those ordered to stay on the job today include nurses in Riverside County Regional Medical Center’s medical and surgical units as well as its emergency department, critical and progressive care units, pediatric units and psychiatric unit, as well as nurses working at jail facilities.

“A strike is not worth somebody becoming dead or somebody being seriously injured,” Riverside County Counsel Pamela Walls argued during the all-day hearing.

County officials on Jan. 24 appealed to the California Public Employment Relations Board to take action against the union regarding the health-care workers, and the state agency filed its lawsuit on Friday.

The county sought to keep the nurses — many of whom will get an 8 percent raise starting next month — on the job.

Vineyard said 17 members of the challenged group — including clinical lab scientists and operating room scrub techs — could join the strike.

An attorney for the union said the county had provided Vineyard with skimpy evidence to back its arguments that the 265 contested health workers had to stay on the job, especially after 11 days’ warning of the strike.

To read entire story, click here.

Executive Editor Frank Pine
Created: 01/28/2012 06:06:04 AM PST

San Bernardino County’s Board of Supervisors asked county lawyers last week to draft language for a ballot measure that would give voters the final say on increases to pension benefits for public employees.

Supervisors Janice Rutherford, Gary Ovitt and Josie Gonzales voted yea with supervisors Brad Mitzelfelt and Neil Derry voting nay.

Gonzales and Mitzelfelt both expressed at least a little ambivalence, saying they wanted to wait and see the final language of the ballot measure before committing.

We didn’t quote Derry in our story, but he was the first person to comment on it once it was posted on our website, and the nuance of his nay is significant.

Derry: “This wasn’t pension reform. It was a feel-good measure that would have had zero impact on current employee pensions and would create a significant roadblock to negotiating pension reductions in the future. How is it `reform’ if the pensions aren’t being changed?”

Mere hours after the board made its decision Tuesday, the head of the county’s most powerful union – the Safety Employees Benefit Association – announced it would fund an initiative to cut supervisors’ pay by reducing their employment status to part time.

Union president Laren Leichliter said the SEBA announcement was not intended to intimidate supervisors and noted that signature gatherers were collecting names the Thursday before the pension item was placed on the supervisors’ agenda.

His quote: “All our elected officials, according to them they’re all overpaid, so we’re just trying to assist them in their progression of trying to save county residents money,” Leichliter said.

Maybe that’s the case, but the timing is pretty suspect and it’s hard to see this as anything other than the latest example of the rough-and-tumble politics of San Bernardino County in particular and California in general.

The real issue here, however, appears to be the county’s ongoing contract negotiations with SEBA. As the county struggles to close daunting budget shortfalls, those negotiations have been anything but smooth.

In December, the county threatened to impose a 14 percent reduction in pay and benefits on SEBA’s Specialized Peace Officers bargaining unit, which includes probation officers, coroner investigators and welfare-fraud investigators.

To avoid that, the unit approved a contract with a 7 percent cut in benefits and a reduction in annual merit raises from 5 percent to 2.5 percent.

The county is now negotiating with the unit that represents sheriff’s deputies, SEBA’s largest constituency.

In the context of the negotiations, both initiative proposals look a lot like bargaining chips.

The irony here is that, in these difficult economic times, both measures will probably pass if they make it to the ballot.

To read entire story, click here.

Would it be churlish to say that the much-ballyhooed Think Long Committee for California fell short on fortitude?

Or merely accurate?

Billionaire Nicolas Berggruen created the committee and invited a Who’s Who of California’s political, civic and economic upper crust – including two former governors, one former chief justice and two former secretaries of state – to become members.

It issued a “Blueprint to Renew California” that advocated major changes in how government is organized and financed, to be put before voters this year.

Berggruen, the committee and the plan received loads of mostly positive media attention – including much outside California – because it appeared to be the first potentially viable effort at structural reform to cure the state’s political dysfunction. But one segment would have been an extensive overhaul of California’s cockeyed taxation system, and it interfered politically with Gov. Jerry Brown’s relatively modest proposal for a temporary hike in income and sales taxes.

Brown doesn’t want competing tax measures on the November ballot, fearing that voters could be confused and reject them all. He and his allies pressured the Think Long Committee to back off and it did.

Instead, Think Long is endorsing some relatively minor, incremental changes in governance, such as a two-year budget cycle, proposed by California Forward, another blue-ribbon civic group.

Briefly put, an organization whose declared goal was to rise above politics-as-usual and improve governance succumbed to politics-as-usual.

To read entire story, click here.

Capitol Alert
The latest on California politics and government
January 29, 2012

The California Teachers Association officially agreed Sunday to back Gov. Jerry Brown’s multibillion-dollar tax plan, which should provide the governor hefty financial support for his fall campaign.

The union represents 325,000 teachers and education workers, and it is a heavy hitter in state politics. Brown is gathering signatures for a November initiative to raise sales taxes by a half-cent and income taxes on high income earners. He has structured his budget so that schools would face a $2.4 billion program cut in 2012-13 if voters reject his proposal, which he says is equal to three weeks off the school year.

The Democratic governor now has support from the state’s two most powerful public employee unions in CTA and the Service Employees International Union State Council. SEIU has not made its support public, but CTA President Dean E. Vogel told his members on Saturday that “SEIU State Council has already taken a support position,” according to a text of his speech.

SEIU spokesman Michael Cox said Sunday his organization has not taken a public position. But sources besides Vogel confirmed SEIU has privately agreed to support Brown. The governor has been working for weeks to convince other tax proponents to step aside, knowing that voters are less inclined to support any tax plan if faced with multiple options.

To read entire story, click here.

By Steven Harmon
Bay Area News Group

Posted: 01/29/2012 06:59:19 PM PST
Updated: 01/30/2012 03:20:06 AM PST

SACRAMENTO — The raging battle over the political and economic clout of labor unions is headed west to California.

The state’s powerful labor groups have anxiously witnessed union rights and benefits being gutted in Wisconsin, Ohio and Indiana. Now, unions in California are girding for an all-out war over a ballot initiative that would curb their ability to raise political cash.

If the November measure passes, unions would have to get written permission from their members every year to use their dues for political purposes.

In California, that’s a fight that could eclipse a presidential ballot filled with other intriguing and controversial measures, including Gov. Jerry Brown’s proposal to hike taxes temporarily.

“This could change the balance of power long after the governor’s taxes are expired,” said Thad Kousser, a political-science professor at UC San Diego. “Defeating this has got to be the top goal of labor. If they don’t, they could become almost extinct in California politics.”

Labor interests are expected to shell out more than the $28 million they spent seven years ago to defeat a similar measure.

On the surface, going after the unions’ clout in California might appear to be a fool’s errand.

Labor is the backbone of the state Democratic Party, which controls the governor’s office and both houses of the Legislature. And the state’s voters have gone blue in all five presidential contests since 1992.

Growing resentment

In 2010 alone, labor spent more than $30 million to help elect Brown over free-spending Republican Meg Whitman, in addition to tens of millions more to secure Democratic victories up and down the ballot.

In 1998 and again in 2005, labor groups thwarted statewide initiatives aimed at cutting off their political lifeblood by prohibiting unions from using dues for politics.

But buoyed by labor’s setbacks in the Midwest, a group of Orange County GOP activists is hoping to tap into growing voter resentment toward public employee unions’ pensions and other perks.

A recent Field Poll showed that a growing number of Californians — from 32 percent two years ago to 41 percent in December — believe public workers’ pensions are too generous. One big reason: Many workers in the private sector have seen their wages drop and pensions disappear in recent years.

Some labor leaders fear that the anger against public unions could raise voters’ ire against all unions. In addition, another planned November ballot measure designed to roll back the pensions of public employees could feed into the hostile environment for labor.

America’s economic anxiety has emboldened conservatives to curb labor’s power, said Joseph McCartin, a professor of labor history at Georgetown University. Labor is under fire around the country from Republicans and wealthy donors such as David and Charles Koch, the billionaire brothers who bankrolled the tea party movement.

To read entire story, click here.

Executive Editor Frank Pine
Posted: 01/28/2012 05:38:39 PM PST

San Bernardino County’s Board of Supervisors asked county lawyers last week to draft language for a ballot measure that would give voters the final say on increases to pension benefits for public employees.

Supervisors Janice Rutherford, Gary Ovitt and Josie Gonzales voted yea with supervisors Brad Mitzelfelt and Neil Derry voting nay.

Gonzales and Mitzelfelt both expressed at least a little ambivalence, saying they wanted to wait and see the final language of the ballot measure before committing.

We didn’t quote Derry in our story, but he was the first person to comment on it once it was posted on our website, and the nuance of his nay is significant.

Derry: “This wasn’t pension reform. It was a feel-good measure that would have had zero impact on current employee pensions and would create a significant roadblock to negotiating pension reductions in the future. How is it `reform’ if the pensions aren’t being changed?”

Mere hours after the board made its decision Tuesday, the head of the county’s most powerful union – the Safety Employees Benefit Association – announced it would fund an initiative to cut supervisors’ pay by reducing their employment status to part time.

Union president Laren Leichliter said the SEBA announcement was not intended to intimidate supervisors and noted that signature gatherers were collecting names the Thursday before the pension item was placed on the supervisors’ agenda.

His quote: “All our elected officials, according to them they’re all overpaid, so we’re just trying to assist them in their progression of trying to save county residents money,” Leichliter said.

Maybe that’s the case, but the timing is pretty suspect and it’s hard to see this as anything other than the latest example of the rough-and-tumble politics of San Bernardino County in particular and California in general.

The real issue here, however, appears to be the county’s ongoing contract negotiations with SEBA. As the county struggles to close daunting budget shortfalls, those negotiations have been anything but smooth.

In December, the county threatened to impose a 14 percent reduction in pay and benefits on SEBA’s Specialized Peace Officers bargaining unit, which includes probation officers, coroner investigators and welfare-fraud investigators.

To avoid that, the unit approved a contract with a 7 percent cut in benefits and a reduction in annual merit raises from 5 percent to 2.5 percent.

To read entire column, click here.

BY DUANE W. GANG
STAFF WRITER
dgang@pe.com

Published: 27 January 2012 08:34 PM

Riverside County will go to court Monday seeking to keep nearly 300 nurses and other health professionals from taking part in a day-long strike planned by the county’s second-largest union.

County officials this week appealed to a state labor relations board for help after the Service Employees International Union Local 721 informed officials at Riverside County Regional Medical Center that nurses planned to participate in the strike Tuesday.

The California Public Employment Relations Board decided Friday to go to court on the county’s behalf to try to prevent 274 nurses, lab technicians and other health care workers from striking. A hearing in Riverside County Superior Court is set for 9:30 a.m. Monday.

“We had to act when the union included those essential employees in its strike plans,” Board of Supervisors Chairman John Tavaglione said in a statement. “We cannot allow anyone to endanger our residents’ health or safety.”

The planned strike marks the latest escalation between the union and county management. SEIU Local 721 represents about 5,800 county workers, from clerks to nurses and 911 dispatch supervisors. The union’s chief negotiator said this week that more strikes are possible if the county does not return to contract talks.

The county declared an impasse and imposed terms on employees late last year as it sought labor concessions as a way to help overcome an estimated $80 million budget gap. Among those terms, employees are starting to pay more toward their own retirements.

But while the county is seeking to keep the nurses — many of whom will get an 8 percent raise starting next month — on the job, union members prepared Friday for the strike.

When the union rejected the county’s final contract offer, members authorized a strike for all 5,800 county workers represented by SEIU. It is unclear how many will not show up for work Tuesday, but union officials said they expect thousands to participate in the protests in front of the County Administrative Center on Lemon Street in Riverside.

The employees worked Friday to build thousands of strike signs and mobilize county workers to turn out for the strike. The union is challenging the pay and benefit cuts county supervisors imposed on them.

“Our hope is on Jan. 31 when we do our strike action, the Board of Supervisors will hear us and go back to the bargaining table,” Kristina Zaragoza, an SEIU member and a county welfare fraud investigator, said Friday as she made signs.

GROWING TENSION

Both sides have appealed to the California Public Employment Relations Board, which arbitrates labor disputes and the collective bargaining process in the state.

In a letter to the county this week, SEIU Local 721’s chief labor negotiator, Wendy Thomas, cited a labor board decision faulting the county for not providing enough information to the union during contract talks. Thomas also accused supervisors of violating the Brown Act, the state’s open meetings law, when they did not publicly announce the impasse and imposed contract terms immediately after a closed-session meeting.

County spokesman Ray Smith said Friday there was never an agreement with the union, so supervisors were under no legal obligation to report the matter out of its closed-session meetings.

“The board gave direction to the designated negotiating team, which is exactly what is allowed under the law,” Smith said.

The union has launched a direct-mail campaign accusing county officials of lavishing expensive perks on themselves and top management, while rank-and-file employees have taken furloughs and other cuts.

To read entire story, click here.

Friday, January 27, 2012 – 09:45 a.m.

Well we finally have it.

San Bernardino  County Board of Supervisors Chair Josie Gonzales admits she’s in it for the dough.

Gonzales made the comment when she learned that a powerful county union is now backing a measure to cut her pay from roughly $151,000 per year, to just $60,000.

Plus benefits of course!

For Gonzales, who’s been privately railing cuts county supes have imposed on their own benefits, it’s always been all about the money.

Especially since she shuttered her family-owned restaurant Mexico-Lindo in Fontana.

Some time ago Gonzales told me she was forced to close the establishment because she wasn’t there to keep an eye on things.

Something totally understandable.

Gonzales has even went as far as to say she won’t run for re-election if the measure passes. Because she needs the money to support her family.

The current hubbub is courtesy of the San Bernardino County Safety Employees Benefit Association (SEBA).

SEBA has taken over the campaign of a ballot measure to make county supervisors part-time.

The measure will also reduce their annual operating budgets to $250,000.

The required signatures must be collected and submitted by early March.

An easily attainable deadline.

But honestly, the supervisors have nobody to blame but themselves.

Two board members, Gary Ovitt and Gonzales presided over the biggest enrichment of their own benefits in county history.

Supervisors Neil Derry, Brad Mitzelfelt and Janice Rutherford have fought to place that largess in check.

A majority-vote block of three supervisors has allowed county management to pretty much go to war with employee unions in order to exact painful wage and benefit cuts, rather than reduce the size of the workforce.

The aforementioned block being led by Rutherford, with Gonzales and Ovitt making three.

The whole collective bargaining process has definitely become hardball, with chief executive officer Greg Devereaux applying a my way or the highway approach.

However the brainiacs at the county government center never saw this monkey wrench coming.

But, then again, Devereaux would probably prefer a part-time board to let him have even more power and dominance.

A board of supervisors emulating a city council would be his preference.

Actually, if Devereaux had his way he would probably want the south-side of the fifth floor dark.

After all, his pay and authority isn’t getting whacked.

Unlike neighboring Riverside County, where county supervisors meet almost every week including those weeks with holidays, the San Berdoo bunch barely meets half the year.

After all it’s a tough job, but somebody’s gotta do it.

Now back to SEBA.

SEBA has nearly a million dollars in political action funds and can easily fund and promote the part-time measure.

As a matter of fact, it’s a drop in the bucket.

What’s amusing is the county’s sabre-rattling.

The county, a charter county, is floating the idea that an initiative is an improper format to cause the pay reduction to occur. Even though the county used the same vehicle to pass Measure P in 2006.

Measure P gave the supes a roughly fifty-percent salary increase phased in over three years.

Sources say the union has budgeted $150,000 just to ensure the measure makes the ballot.

It won’t take anywhere near that much money to accomplish the goal.

San Bernardino County supervisors have too much to do, the chairwoman says after a union backs the idea

BY IMRAN GHORI
STAFF WRITER
ighori@pe.com

Published: 26 January 2012 09:27 PM

A proposal to reduce San Bernardino County supervisors’ positions to part-time status would leave little time for them to meet and respond to constituents’ needs, board Chairwoman Josie Gonzales said Thursday.

“They would probably never see us because the obligations that are mandated of us would take priority,” she said.

Earlier this week, the San Bernardino County Safety Employees’ Benefit Association, SEBA, announced it is backing the proposed ballot measure to make supervisors’ part time and cutting their pay, benefits and staff.

The announcement came only hours after the board voted to draft a ballot measure requiring voter approval before retirement benefits for county employees, legislative officers and elected officials could be increased.

SEBA, which represents about 3,100 public safety employees, and the San Bernardino Public Employees Association, representing about 11,000 general employees, both spoke against that proposal.

SEBA promised to provide funding and support to gather enough signatures to place the part-time proposal before voters. Union officials have accused supervisors of delegating too many of their duties to county Chief Executive Officer Greg Devereaux and were already meeting less often.

“In these austere times, part-time work should result in part-time pay,” SEBA President Laren Leichliter said.

HUGE PAY DIFFERENCE

The ballot measure does not specify the amount of hours that supervisors could work but cuts their pay from $151,971 a year to $60,000 a year. It also reduces their combined budget for staff and office expenses from $6 million to $250,000 a year.

The measure was first proposed by a group calling itself Committee to Reform San Bernardino County Government in September. But the backing of SEBA, one of the most influential players in county politics, instantly raised the profile of the proposal.

Leichliter conceded the timing of SEBA’s announcement made it appear as if the union’s backing was in response to the pension measure but said it had been in discussions with the original proponents since October.

A poll conducted by SEBA found 73 percent support among voters, he said. The original proponents have already collected 12,000 signatures, Leichliter said.

To read entire story, click here.

San Bernardino County supervisors Brad Mitzelfelt, First District; Janice Rutherford, Second District; Neil Derry, Third District; Gary Ovitt, Fourth District; and Josie Gonzales, Fifth District (File photos)

Joe Nelson, Staff Writer
Posted: 01/25/2012 04:21:42 PM PST

A proposed initiative to make county supervisors’ jobs part-time would spell doom for residents desiring a stronger presence of government in their communities, San Bernardino County Board of Supervisors Chairwoman Josie Gonzales said Wednesday.

“In my opinion, the representation would be extremely limited, and in the unincorporated areas I would venture to say next to none,” Gonzales said.

Laren Leichliter, the president of the San Bernardino County Safety Employees Benefit Association, or SEBA, announced the initiative Tuesday after supervisors directed county counsel to prepare a ballot measure proposing that any benefit increases for county employees proposed by county supervisors be put to a vote of the citizens.

He said the board has slashed its meeting times in half over the past two years, has delegated much of its constitutional duties to Chief Executive Officer Greg Devereaux and that land-use responsibilities are shrinking with annexations and incorporations.

SEBA is backing initiatives that make up the San Bernardino County Elected Officials Pay Reduction Act, filed with the Registrar of Voters in August by 84-year-old Wrightwood resident Kieran Brennan. The three initiatives propose reducing county supervisors’ job status to part-time, limiting campaign contributions to elected officials to no more than $1,000, and placing limits on county employee pension benefits.

Under the initiative calling for part-time county supervisors, each supervisor’s staff budgets would be cut from $1.5 million to $250,000 annually.

Gonzales said supervisors would not be able to run their offices on a budget of $250,000 a year, even if they worked for free.

In a similar initiative brought last year in Riverside County, a Superior Court judge sided with Riverside County Counsel Pamela Walls, who argued the initiative was in violation of the state Constitution, which mandates that such proposals be put to a referendum, not an initiative.

Former Norco Councilman Herb Higgins withdrew his petition to circulate the initiative in March, said Riverside County spokesman Ray Smith.

San Bernardino County spokesman David Wert said in an email Wednesday that county counsel had no intention of going in the same direction as Riverside County.

“If the county were to make such a challenge, it would not consider doing so until after an initiative passes,” Wert said.

To read entire story, click here.

Safety union announces push for part-time supervisors
January 25, 2012 10:31 AM
Natasha Lindstrom, Staff Writer

SAN BERNARDINO • On a split vote Tuesday morning, the San Bernardino County Board of Supervisors directed staff to draft a ballot measure that would require voter approval for any future pension increases for county employees.

A few hours later, the county Safety Employees’ Benefit Association announced it was funding an effort to reduce the Board of Supervisors to part-time status.

The pension ballot measure would prevent any increases in retirement benefits for county employees, legislative officials and elected officials without voter approval. It would make exceptions for cost-of-living adjustments.

Supervisors Janice Rutherford and Gary Ovitt touted the idea for giving taxpayers a say in retirement benefits, and Supervisor Josie Gonzales voted in favor of at least reviewing a draft proposal.

But supervisors Brad Mitzelfelt and Neil Derry rejected the idea over concerns it would hamper upcoming contract negotiations without addressing comprehensive pension reform.

“Nobody’s talking about increasing any pensions. It wouldn’t change any formulas,” Derry said by phone before SEBA’s announcement. “This measure was a big stick in the eye and it was unnecessary and it wouldn’t change a thing, but it would hurt our ability to negotiate future pension reforms with our unions. While we need to come to an agreement, we need to do it in a manner that’s fair and open and creates dialogue, not something that shuts the dialogue down.”

Mitzelfelt had some similar concerns, though depending on the drafted proposal’s details “he may still vote to place the proposed measure on the ballot,” according to David Zook, chief of staff for Mitzelfelt.

SEBA, comprised of 3,100 members including sheriff’s deputies, district attorney investigators and probation corrections officers, is backing the “San Bernardino County Elected Officials Pay Reduction Act” to reduce compensation for supervisors and slash their office budgets from a total of $6 million to $250,000 per office.

The SEBA Political Issues Committee has been funding paid petition circulators “who are gathering signatures at a record pace” for the “very popular charter amendment,” according to a statement by SEBA President Laren Leichliter.

“It is our position that the Board of Supervisors has become a part-time body and should be compensated accordingly,” Leichliter said in the statement. “Over the past two years they have met barely 50 percent of the time. They have delegated much of their constitutional duties to an unelected CEO. Their land use responsibilities are shrinking with annexations and incorporations.”

Other actions at Tuesday’s meeting included

• The board directed staff to draft an ordinance reducing elected department heads’ benefits packages to put them in line with counterparts in neighboring counties. The decision was made on a 4-1 vote, with Gonzales opposing. Supervisors already approved a similar ordinance reducing their own benefits by about $48,000 annually.

• Supervisors set aside $2.63 million for a new Spring Valley Lake fire station and awarded a $210,091 design contract to STK Architecture. To save on costs, STK will base the design on a modified version of the design for the county’s new station in Needles. The project is expected to begin construction in late summer or early fall and be completed in fall 2013.

• The board approved a new prescription drug discount program for Sans Bernardino County residents. Coast2Coast Rx cards, which cover more than 60,000 medications, can be printed at www.coast2coastrx.com/sbc.

Natasha Lindstrom may be reached at (760) 951-6232 or at NLindstrom@VVDailyPress.com.

Get complete stories every day with the “exactly as printed” Daily Press E-edition, only $5 per month! Click here to try it free for 7 days. To subscribe to the Daily Press in print or online, call (760) 241-7755, 1-800-553-2006 or click here.

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San Bernardino County supervisors Brad Mitzelfelt, First District; Janice Rutherford, Second District; Neil Derry, Third District; Gary Ovitt, Fourth District; and Josie Gonzales, Fifth District (File photos)

Joe Nelson, The (San Bernardino County) Sun
Posted: 01/23/2012 03:05:32 PM PST

The president of San Bernardino County’s most powerful labor union announced Tuesday it is bankrolling an initiative to reduce county supervisors’ jobs to part-time status.

The announcement by Laren Leichliter, president of the San Bernardino County Safety Employees Benefit Association, or SEBA, came hours after he appeared before the Board of Supervisors to protest pension reforms proposed by Supervisors Janice Rutherford and Gary Ovitt.

On a narrow vote, the board authorized county counsel to draft a ballot measure requiring any proposed pension increases for county employees be put to a vote by taxpayers.

Leichliter was one of two union leaders, the other Bob Blough of the San Bernardino County Public Employees Association, which represents roughly 11,000 county employees, to appear before the board to protest the proposed pension reforms.

SEBA is the union that represents sheriff’s deputies and other public safety employees. Leichliter said his announcement was not an intimidation tactic,and that the union had petition circulators out as early as last Thursday, before the pension reform item was placed on the supervisors’ agenda.

“All our elected officials, according to them they’re all overpaid, so we’re just trying to assist them in their progression of trying to save county residents money,” Leichliter said.

Rutherford, however, saw the announcement as an intimidation tactic aimed at deterring supervisors from adopting any employee pension reforms.

“Clearly, unions are used to getting their way,” Rutherford said. “They’re (SEBA) angry at the thought to pension reform happening, so they’re trying to bully the board and they’re used to it. They’ve done that for a long time in this county.”

Before Leichliter’s announcement, Supervisors Neil Derry, Josie Gonzales and Brad Mitzelfelt expressed concern about various issues regarding Rutherford’s and Ovitt’s proposal, such as how the reforms could disrupt ongoing negotiations between the county and its labor unions and concerns that the proposal was rushed.

Both Gonzales and Mitzelfelt said they would rather wait and review the draft ballot measure so they could make an informed decision.

Leichliter said a Wrightwood resident launched the petition drive and had gathered roughly 14,000 signatures before signing the responsibility over to SEBA. The union needs a total of 53,000 petition signatures to get a measure placed on the November ballot.

To read entire story, click here.

Supervisor Josie Gonzales

BY IMRAN GHORI
STAFF WRITER
ighori@pe.com

Published: 24 January 2012 07:08 PM

San Bernardino County supervisors moved forward Tuesday with a proposal to require voter approval of future pension increases but face opposition from employee unions who quickly announced plans for a competing measure aimed at supervisors.

The board agreed to have county staff draft a ballot measure requiring voter approval before retirement benefits for county employees, legislative officers and elected officials could be increased. But final approval is not assured with supervisors split 3-2 on whether to consider the proposal.

Board Chairwoman Josie Gonzales, who cast the tie-breaking vote, expressed serious misgivings but said she would wait until seeing the ballot measure language before making a final decision.

Supervisor Janice Rutherford said the measure allows voters a say in long-term costly financial decisions. For every dollar the county spends on salaries, 27 cents is paid for pension costs for general employees and 47 cents for public safety employees, she said.

“This is simply insurance for the taxpayers who will be footing the bill long after politicians and union leaders are out of the picture,” Rutherford said.

She said she hoped to have the ballot measure ready for the June election. She noted that other counties, including Riverside and Orange, have enacted similar measures.

But leaders for the two largest unions representing county employees said it could hurt the county’s ability to work with the groups in the future.

“Do you not trust your own ability to make decisions you were elected to make?” Bob Blough, general manager of the San Bernardino Public Employees Association, representing about 11,000 county employees, asked them.

Laren Leichliter, president of the Safety Employees Benefit Association, representing about 3,100 public safety employees, echoed those sentiments. He said unions would not be able to trust negotiations with the county, knowing that it could ultimately hinge on an election campaign.

Rutherford said the proposal does not take away employees’ benefits but merely requires them to make the case for any increases to voters. However, only Supervisor Gary Ovitt, who co-sponsored the measure, expressed support.

To read entire story, click here.

Agreement delays decisions on furlough days, benefits cuts
January 24, 2012 3:29 PM
Natasha Lindstrom, Staff Writer

VICTORVILLE • Three months after declaring an impasse, the Victor Valley Union High School District and its teachers union have struck a tentative agreement. (Click here to read the agreemment.)

But rather than resolve contentious compensation issues, the proposed deal essentially delays the hard decisions until negotiations resume in March for the 2012-13 school year.

District officials had been pushing to issue teachers eight furlough days, or unpaid days off, in the name of ensuring the district’s long-term financial stability. Union officials had protested the furloughs for slashing teacher pay by 4 to 7 percent and argued the district could instead pull from its healthy reserves.

Monday marked the third negotiation session led by an impartial state mediator, with several dozen teachers wearing bright red union shirts and signs like “Treat teachers fairly” while picketing outside all three meetings.

Under the tentative agreement reached Monday, existing teacher contract terms will remain in effect until at least June 30. The district could have opted to advance through the impasse process in an attempt to ultimately force furloughs on the teachers.

“It was very nice to see the district was working real well with the negotiating team,” VVTA President Jose Berrios said by phone Tuesday. “It was a real good meeting. It was a good positive step.”

The agreement states that salary and health and welfare benefits are “automatic reopeners” this spring when negotiations resume. It also requires both sides to “sunshine,” or disclose at a public meeting, their initial proposals for the 2012-13 school year by March 1.

“The District would like to thank VVTA and its negotiating team for their professionalism at the bargaining table and looks forward to productive bargaining session, commencing in March 2012,” states a district memo to all certificated staff from Steven Desist, assistant superintendent of human resources.

Desist did not return a Tuesday call for comment.

It’ll be up to union members to determine their next specific proposals, Berrios said, though it doesn’t seem likely they’ll be eager to swallow the concessions the district has wanted. Teachers are also waiting to see if Gov. Jerry Brown’s tax initiative will pass and improve the district’s fiscal situation.

“We still feel that there’s enough in the reserve that we can survive,” Berrios said.

The union membership now has 10 days to ratify the agreement with a vote before sending it to the district board for adoption.

If green-lighted by the union, the deal means it won’t be necessary for the district to take the next step to resolve an impasse called fact-finding, which would have involved a panel listening to arguments for both sides at an evidentiary hearing

Natasha Lindstrom may be reached at (760) 951-6232 or at NLindstrom@VVDailyPress.com.

Get complete stories every day with the “exactly as printed” Daily Press E-edition, only $5 per month! Click here to try it free for 7 days. To subscribe to the Daily Press in print or online, call (760) 241-7755, 1-800-553-2006 or click here

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BY DUANE W. GANG
STAFF WRITER
dgang@pe.com

Published: 23 January 2012 10:39 PM

Riverside County’s second-largest union is planning a one-day general strike next week to protest the pension and benefit changes imposed on employees last year.

The Service Employees International Union Local 721 put the Riverside County Regional Medical Center on notice Friday that the Jan. 31 work stoppage is planned. The union is expected to file similar notice to the county today for non-medical workers.

The possibility of a strike — even for one day — marks the latest escalation between the union and county management. SEIU Local 721 represents about 5,800 county workers, from clerks to nurses and 911 dispatchers.

To read entire story, click here.

The San Bernardino County Board of Supervisors is poised to direct county administrators to draft a ballot measure that would require voter approval for any proposed increases to county employee retirement benefits.

It comes amid a spate of proposed benefits cuts to county supervisors and other elected officials. Earlier this month, the board approved an ordinance that cuts their benefits by 40 percent. The ordinance goes before the board today for adoption.

In addition, Supervisors Neil Derry and Janice Rutherford are proposing an ordinance that would further expand benefits cuts to the county’s other elected officials. The board is expected to discuss the proposed ordinance today and recommend that county administrators and staff further research the item.

To read entire story, click here.

Dan Walters

Published: Monday, Jan. 23, 2012 – 12:00 am | Page 3A

Whenever someone suggests that California’s public employee pension systems need reform, civil service unions react dismissively, often with attacks on the credentials or even the morals of critics.

When, for example, a Public Policy Institute of California poll found strong support – even among public workers themselves – for Gov. Jerry Brown’s middle-of-the-road pension reform plan, the union-backed Californians for Retirement Security reacted thusly:

“These poll results are not surprising. They amount to more fallout from a sustained and unrelenting misinformation campaign being fed to Californians,” and continued: “Millions of public servants in California are doing their jobs and planning their futures with the promise of retirement security made to them. Even they are being peppered, however, with misleading and disproportionate examples of the tiny fraction of six-figure pensions and isolated cases of abuse. Pensions equal less than 3 percent of this state’s beleaguered budget, while California corporations swim in profits and are dodging contributing tens of billions to state coffers through a slew of tax breaks.”

A day after that poll was published, a research team based at Stanford University and headed by former Democratic Assemblyman Joe Nation released an updated analysis of state and local pension funds, concluding that they are hundreds of billions of dollars underfunded, and unless reformed, will seriously erode future financing of schools, health care and other services.

The reaction from Californians for Retirement Security was even more scathing, to wit:

To read entire column, click here.

Wes Woods II, Inland Valley Daily Bulletin
Created: 01/09/2012 03:03:05 PM PST

View Document: Lawsuit filed by Claremont police union vs. city and chamber

CLAREMONT – The Claremont Police Officers Association has filed a lawsuit against the Claremont Chamber of Commerce and the city alleging its right to freedom of expression, association and assembly were violated at the Village Venture event in October.

According to the lawsuit, Robert Ewing, a detective and association president, and others were not allowed to hand out fliers related to the association’s stance on contract negations with the city.

The incident took place at the arts and crafts fair in downtown that is put on by the city and the chamber.

City Manager Tony Ramos said the City Council would meet tonight in closed session about the lawsuit because it’s a “litigation matter.”

“If you saw that flier the guys were handing out … it paints the City Council in a position that highlights how they’ve been detrimental to public safety,” said Dieter Dammeier, an attorney for the Police Officers Association.

The city “didn’t want the facts to come out.”

On the flier is the phrase “Why Is City Council Gambling With Your Safety?” and includes a hooded man with a gun and a flashlight. Statements on the flier such as “Police budget reduced,” “97 sex offenders” and “1908 parolees” are imposed on a roulette wheel.

Ewing contacted chamber staff member Maureen Aldridge about two weeks before the event and asked to participate, according to the lawsuit.

He told Aldridge that the association wanted to set up a booth to distribute materials related to the association’s position on the contract negotiations, according to the lawsuit.

Aldridge said the association would not have to pay a normally required fee, and it could set up next to the Police Department’s command post.

Ewing set up the association’s booth next to the Police Department’s equipment, but Police Chief Paul Cooper said the association was not allowed to have its booth at the location, according to the lawsuit.

In response, a booth was set up a short distance away and fliers were handed out.

Aldridge later told association members that they could not have a booth at all, according to the lawsuit.

To read entire story, click here.

Assemblyman Tim Donnelly, R-Twin Peaks.

THE PRESS-ENTERPRISE
Published: 08 January 2012 07:02 PM

Last week started badly for Inland Assemblyman Tim Donnelly and only got worse.

The Twitter-verse erupted Tuesday after security officers found a loaded handgun in Donnelly’s carry-on luggage at Ontario International Airport. Donnelly, R-Twin Peaks, said he forgot he had put the gun in his briefcase and believed he was carrying his laptop computer.

Within hours, someone had created a “TimDonnellysGun” Twitter account. “Guns don’t kill, they’re like laptops,” wrote the unidentified author, who had 115 followers by Friday.

Big Bear Lake Mayor Bill Jahn, a Republican who is challenging Donnelly in the redrawn 33rd Assembly District, piled on.

“I’m a gun owner, too, but I know where my gun is at all times,” said Jahn, who reported last week that he had given almost $100,000 to his campaign.

The week ended with the failure of a Donnelly led campaign to qualify a ballot measure to overturn last year’s law making scholarship aid available for college students who are in the country illegally.

“Today only marks the end of one battle in a war to reclaim our voice in our legislature,” Donnelly wrote

UCR ‘WASTE’ DISPUTED

A study at UC Riverside that’s trying to gauge the enjoyment people get from social media is making Sen. Tom Coburn an unhappy man.

Coburn, R-Okla., is a frequent critic of what he calls wasteful government spending. And just like Santa, he makes his naughty list known in December, with the release of his annual Wastebook report that identifies the 100 most troubling uses of federal money.

“Video games, robot dragons, Christmas trees, and magic museums. This is not a Christmas wish list, these are just some of the ways the federal government spent your tax dollars,” Coburn said in a news release.

Two Inland projects made the list. UCR researchers are using $149,900 from a National Science Foundation grant to develop a video game for phones and other mobile devices that teaches children the evolutionary development of guppies. The game partners university staffers with private video game companies and includes a social media campaign, Coburn said.

Another UCR project also trades in tweets.

Two researchers were awarded $413,756 over two years to examine whether use of social media sites like Twitter and Facebook make people happy, Coburn said.

The university defended the projects, pointing out that both are led by prominent researchers in their field.

“Since hundreds of millions of people use social media it is important to know whether this helps or hurts psychological functioning,” UCR spokesman Sean Nealon said, in an email.

To read entire column, click here.

Public Money

BY: Girard Miller | January 5, 2012

One of my pet peeves in the ongoing debates over public pension reform is the way partisans on each side try to pitch half-truths and myths to support their arguments. The other side seldom believes any of these, but they help rally the allies on the speaker’s side. Sometimes the press naively re-circulates these fallacies, which leaves the general public even more confused about what to believe. There’s an old saying in politics that if you tell the same lie long enough, the public will eventually believe it — and that apparently is the mentality of lobbyists on both sides. In an effort to start the new year with a clean slate for public debate, I’d like to set the record straight on a dozen of the most glaring fallacies and silly slogans.

This is a lengthy column, so readers can click on to any one of these topics to jump to that subject

1. “The pension mess was caused by greedy people (from the other side), not us.”

2. “There’s no crisis. The stock market will recover and then there is no problem.”

3. “The solution is to replace pensions with 401(k) plans, like the private sector.”

4. “Experts consider 80 percent to be a healthy pension funding ratio.”

5. “Only 15 percent of pension costs is paid by employers. Investment income pays the lion’s share.”

6. “My pension contract is protected by the Constitution and can’t be violated.”

7. “States are already fixing the problem with reasonable pension reforms.”

8. “The solution is collective bargaining. There is no need for drastic legislation.”

9. “This is a $3 trillion problem when you measure it using honest (risk-free) math.”

10. “We earned more than 8 percent in the last 25 years, and will do so again.”

11. “The average public pension is $23,000.”

12. The $100,000 pension club.

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So let’s look at each of these myths, misrepresentations and slogans, one-by-one

Half-truth #1: (Multiple-choice) “The pension mess was caused by greedy …
(a) Employees
(b) Unions
(c) Politicians
(d) Wall Street investors and bankers
… and they are the ones who should pay to fix it.”

There is a target for every finger-pointer. The truth is that the pension community has plenty of blame to go around. About half of the underfunding in most public pension plans is attributable to the six-sigma market plunge that nobody saw coming in 2008. When stocks declined by 55 percent in the last recession, more than double the average decline in the 13 previous recessions, that knocked a gaping hole in funding ratios and doubled the average plan’s unfunded liabilities. I guess you could try to blame the big banks and the homebuilders and the money managers and the mortgage brokers and the speculators and hedge funds and the real estate industry and the CEOs of the Fortune 500 with their short-sighted stock options and Fannie Mae and Freddie Mac and the Congress that goaded them to lend to unworthy borrowers in the name of universal homeownership, for causing pension deficits. But I’m at a loss to see how that will ever help us fix the public pension problem.

Yet that is only half of the story. Long before the Great Recession, the seeds of today’s mess were carelessly sown by politicians who declared pension holidays, unions that bargained for retroactive pension increases, trustees who assumed that investment returns would continue to grow to the moon, employers that granted early retirement incentives and gave away benefits to pass the buck to future taxpayers, pension administrators who were too timid to stand up to self-interested trustees or stakeholders and insist on more conservative practices, accountants who allowed unfunded liabilities to be amortized over two generations, and actuaries abetted by investment advisors who jiggered the investment portfolios toward ever-riskier allocations to enable disingenuous trustees to justify discount rates that would avoid the inevitably heftier contribution rates needed to assure intergenerational equity. Those who point fingers of blame should first look in the mirror.

Half-truth #2: “There is no crisis. Once the stock market recovers, there is no problem.”

Some of today’s pension Pollyannas claim that when stock-market trends return to their historical averages, everything works out. That is simply ignorance and puffery from people who don’t even bother to understand pension math. The actuarial projections used by most public pension plans are already assuming that 85-year historical returns will continue indefinitely, even though many of the major investment consultants have already dialed down their projections for the next decade. Perpetual stock-market increases of 10 percent annually are already baked into the funding ratios that now hover just above 70 percent on average nationwide. Even if stocks return next year to their previous peak levels (DJIA 14,100), that wouldn’t restore pre-recession funding ratios. That’s because there have been no capital gains from equities for the five intervening years while the underlying liabilities have grown about 50 percent. Stocks may have good and bad growing seasons, but there is never a crop failure on the liabilities farm. As I explained last year, stock indexes would have to double in the next two years to restore most pension funds to their 2007 funding ratios. To return the average pension fund to full funding, stock markets would have to produce 14 percent compounded returns the rest of this decade, with no intervening recession. That would put the Dow Industrials at 30,000 in January 2020. I’ll gladly give even odds against that scenario to anyone who wants to buy into that long-shot.

Half-truth #3: “The solution is to replace pensions with 401(k) plans, like the private sector.”

First of all, new 401(k) plans cannot be instituted for state and local government employees under the 1986 tax act. Pre-existing “k” plans are allowed, but there is no ongoing federal tax authority to install these corporate-style, defined contribution (DC) plans for public employees. But there are 401(a) defined contribution plans that can be offered, so a DC option is still available by law. However, the creation of a new DC plan does nothing to eliminate or even reduce the unfunded liability of a pension system. In fact, it probably makes matters worse, as described in my earlier column on this topic.

Freezing an existing pension plan will compel prudent trustees to adopt a more conservative investment portfolio to manage its risks as retirees age (just like individuals must de-risk their own investments as they age), and that will reduce the discount rate which in turn increases the employer’s contribution rates. This doesn’t mean that DC plans should not be part of the solution, but a wiser approach is a hybrid structure with a smaller pension (using a 1 percent multiplier) with a companion DC plan — like the federal employees’ system or the Washington state model. Rhode Island has officially figured this out, as did California Gov. Jerry Brown in his proposed reforms.

Half-truth #4: “Experts consider 80 percent to be a healthy funding level for a public pension fund.”

This urban legend has now invaded the popular press, so it’s about time somebody set the record straight. No panel of experts ever made such a pronouncement. No reputable and objective expert that I can find has ever been quoted as saying this. What we have here is a classic myth. People refer to one report or another to substantiate their claim that some presumed experts actually made this assertion (including a GAO report and a Pew Center report that both cite unidentified experts), but nobody actually names these alleged “sources.” Like UFOs, these “experts” are always unidentified. That’s because they don’t actually exist. They can’t exist, because the pension math and 80 years of data from capital markets history just don’t support these unsubstantiated claims.

With only one rare and fleeting exception (which occurs at the very bottom of a business cycle, similar to the green flash in a tropical sunset), 80 percent funding is not a sufficient, sound or healthy funding level for a pension fund. The only authoritative references to 80 percent funding ratios are the federal ERISA and pension protection act provisions which require private-sector pension plans below 80 percent funding to take immediate remedial action! (Remember that public plans are not even governed by these laws.) These statutes do not make funding ratios at 80 percent “healthy” or “good” or “sound” or “well-funded.” Pensions funded at 80 percent are no different than a $400,000 house in a distressed neighborhood with a $500,000 mortgage — you can keep living there if you keep making the payments, but it’s underwater and your balance sheet is now upside down no matter how much you try to double-talk it. The only difference is that state and local governments can’t mail in the keys to the bank.

Until the last recession, respectable and world-wise actuaries would tell you privately that when a pension system gets its funding ratio above 100 percent, there is a political problem. Employees, unions and politicians suddenly become grave-robbers who invariably break into the tomb to steal enhanced benefits and pension contribution holidays. So these savvy advisors historically have tolerated modest underfunding, based on their recurring past experience with the forces of evil in this business. They figured the ideal public plan would drift between 80 to 100 percent funding over a market cycle, and nobody would be hurt if the plans were a “little bit underfunded” in normal times. Obviously that didn’t work out so well in the Great Recession, which has forced us all to take a harder look at the math and this conventional wisdom.

As I have explained in one of my very first Governing columns in late 2007 (when the last business cycle was peaking), a fully funded pension plan must today have market-value assets of 125 percent of current accrued actuarial liabilities near the peak of an average business cycle — in order to offset the near-certain loss of stock market values in the following recession. Historically, that is because the 14 recessions since 1926 (including the most recent) have shrunk equity values by 30 percent on average, and equity investments represent about two-thirds of the average public pension funds’ portfolio. Real-time pension funding ratios will therefore likely decline by about 20 percent in the average recession, depending on how much the bond portfolio offsets the stock losses and mounting liabilities. So there is not a major public pension plan in the United States today that can be described as “overfunded.”

A pension plan that is 100 percent funded at the end of a business expansion will likely lose 20 percent of its value in an average recession, so 80 percent is the bare-minimum “healthy” funding level at the bottom of a recession — and only then. Once the economy begins to recover, it is mathematically necessary for a reasonable funding ratio to be higher than 80 percent and rising on a clear path to full funding. Otherwise, the plan is doomed to be chronically underfunded with current taxpayers supporting retirees who didn’t ever work for them. A plan funded at 80 percent going into a recession will likely find itself funded at 65 percent at the cyclical trough — and that’s a toxic recipe calling for huge increases in employer contributions to thereafter pay off the unfunded liabilities. That’s why today’s 70 percent funding ratios are a legitimate concern and a financial burden on younger generations who will inherit this problem that their elders keep sidestepping.

Just think for one minute about what would happen if Europe unravels or China lands hard and we suffer another average recession from today’s levels. That would take most pension funding ratios well below 60 percent percent and trigger a more horrendous multi-year budgetary catastrophe for public employers nationwide. Pension trustees and plan administrators with funding ratios at or below today’s national average should be asking that question on the record in formal board sessions — if they understand how fiduciaries are expected to perform their duties.

One can argue that a pension plan with 80 percent funding today can be deemed prudently funded if it adopts a more aggressive amortization schedule that defrays its unfunded liabilities over the average remaining service period of incumbent employees. That’s essentially what the GASB’s proposed service-life amortization guidelines would ultimately imply. Anything less should invite suspicion and deserves serious reconsideration of the plan’s funding policies and benefits levels. And if employees put skin in the game by agreeing to hereafter bear one-half the cost of paying down the plan’s unfunded liabilities during their working years, we can then talk about 80 percent funding as a logically “healthy” or “sustainable” number.

Half-truth #5: “Public employers and thus taxpayers only pay about 15 percent of the cost of public pensions. The rest comes from employee contributions and the investment income.”

The idea that investment income comes out of thin air to pay the bills is disingenuous and deceptive. I’m all for actuarial pre-funding and using the power of compounding investment earnings to achieve intergenerational equity, but “interest follows principal.” If employers/taxpayers hadn’t made their contributions, there would be no investment income in the pension fund. Instead, the employers/taxpayers could have invested the money themselves and pocketed the earnings. Especially for police and fire funds and the majority of pension plans with serious underfunding, most public employers today continue to make the lion’s share of total contributions — even though we are beginning to see worthwhile incremental increases in employee contributions toward normal costs in some states. But when you count employer contributions to pay for unfunded liabilities that are required (because investments didn’t earn what these same pension advocates expect them to earn as part of this myth), the employers’ share dwarfs most employees’.

If interest does not follow principal, then why do plans pay interest on refunds on unvested participants’ contributions, and retirees’ deferred retirement “DROP” accounts?

Half-truth #6: “This is a contract, protected by the federal Constitution’s contracts clause. You can’t reduce my pension.”

The federal Constitution also authorizes Congress to create bankruptcy courts, which routinely overturn contracts, although I doubt that municipal bankruptcy proceedings will be the solution to pension problems, as explained in an earlier column on bankruptcy and benefits reform.

There is no question that some state constitutions declare the pension promise to be inviolable, and some state courts have held that the pension promise is a contract. In “normal” economic times when the pension plan is properly funded, almost everybody would agree that contractual pension obligations should be fulfilled. But these are not ordinary times, and dozens of major public pension plans are facing the potential for depletion of their assets during the lifetimes of current employees if nothing is changed. Ultimately, some municipal employers will face a genuine financial emergency if they don’t significantly revise their plans’ benefits structures. We have already seen such actions upheld in Colorado and Minnesota, where courts held that benefits changes could be made, in order to preserve a reasonable benefit for everybody in the plan. Rhode Island just enacted a law to change benefits including the retirement age for incumbent employees. The city of Cincinnati took similar actions. In some states, these “breaches of contract” will go to court, but what the plaintiffs often do not understand when they file suit is that several courts have supported the police power of the state to make plan modifications if they are necessary — provided that the remaining benefits are reasonable, and if the plan change is the minimum change required to fix the plan. The simple economics of pension plans inform us that the sooner you fix them, the less pain the beneficiaries will suffer later on. This does not mean that every underwater pension plan should stiff its retirees; the plan must clearly be at risk and alternative remedies should be explored. In fact, the courts typically require such efforts before they impair contracts and reduce vested benefits.

Half-truth #7: “Many states have already adopted pension reforms. We can manage through this problem with some moderate consensus-based changes.”

As this editorial cartoon from California illustrates, the magnitude of the pension problem dwarfs the scope of reforms enacted in most state legislatures and proposed in others. Not that I would belittle the work done so far and the ongoing efforts of pension reformers nationwide. But the simple math is that, when you include both the pension and the retiree medical benefits (OPEB) obligations, we are facing a $2.5 trillion problem with state and local government retirement deficits. Most of the state reforms made to date focus on prospective benefits changes, often with increased employee contributions and sometimes with higher retirement ages for new hires. But they seldom address the massive unfunded liabilities of the plans. Very few states have seriously attacked the unfunded liabilities, which leaves the bills for these debts to the next generation — what President Obama rightfully calls “kicking the can.”

What’s worse mathematically, not even one state has adopted laws to require public employers to begin funding their OPEB plans on an actuarial basis. Not one. What are we waiting for? It’s been 28 years since Massachusetts belatedly joined the other 49 states to require actuarial funding for pensions instead of pay-as-you-go. It’s been 7 years since GASB issued Statement 45 to put OPEB liabilities on the books. The DNA tests are all positive: How much longer will it take the legislatures to admit paternity of this orphaned child?

Half-truth #8: “The necessary changes can be achieved through collective bargaining.”

I’m quite impressed by dozens of public-sector unions that have stepped up and agreed to increase employee contributions to support their current benefits. Their leadership is directionally correct, and although their critics may quibble with the magnitude of their concessions, these specific unions deserve genuine praise for becoming part of the solution. They genuinely understand the value of the benefits, and their members are willing to pay a fair personal price to preserve them. I’ve even seen a few cases where unions have agreed to share some of the cost of contributions to their OPEB (retiree medical benefits) That was unheard-of in most localities before GASB shed light on the size of those liabilities seven years ago. So my hat’s off to you folks: your hearts are in the right place, and your payroll deductions are too.

That said, most unions must still be dragged to the table to address retirement plan reform. When confronted with harsh reality, most will begrudgingly agree to plan changes for new hires. But in 2012, real change must begin with incumbent employees. At the very least, we must see more multi-year increases in employee contributions for both pensions and OPEB. Where state law permits prospective benefits reforms for future service of current workers, those must be included in the package as well.

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BY IMRAN GHORI
STAFF WRITER
ighori@pe.com

Published: 06 January 2012 11:19 AM

Defense attorneys in the Colonies corruption case announced in court Friday morning they are seeking records from an influential union representing public safety employees.

Attorneys are also seeking additional records from the county flood control district concerning its four-year legal battle with Colonies Partners.

They filed subpoenas seeking the documents from the San Bernardino County Safety Employees Benefit Association and the county, but Judge Michael Smith delayed making any decision after attorneys said they are continuing to discuss agreements to get the material.

The documents were sought as part of the Colonies bribery case.

Rancho Cucamonga developer Jeff Burum, former county Supervisor Paul Biane, former Assistant Assessor Jim Erwin, and Mark Kirk, former chief of staff to Supervisor Gary Ovitt, face conspiracy and bribery-related charges.

Prosecutors have alleged that a $102 million settlement the county approved in November 2006 with Burum’s company, Colonies Partners, was a result of bribery and extortion.

Erwin’s attorney, Rajan Maline, filed the motion seeking records from SEBA detailing its involvement in the November 2006 campaign for Measure P, a pay increase and term limit measure that Biane championed.

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SAN BERNARDINO – Defense attorneys in a San Bernardino County corruption case are requesting documents from a public safety labor union they believe will help refute allegations of blackmail against a Rancho Cucamonga developer and the union’s former president.

The attorneys are also seeking from the county’s Flood Control District documents from its nearly five-year legal battle with Rancho Cucamonga-based Colonies Partners LP. Colonies’ co-managing partner Jeff Burum filed a civil lawsuit against the county in March 2002, alleging the county refused to pay for flood control improvements on property owned by Colonies Partners’.

The requests were addressed Friday by lawyers for four defendants in the alleged corruption case – Burum, former county Supervisor Paul Biane, former Assistant Assessor Jim Erwin, and Mark Kirk, former chief of staff for Supervisor Gary Ovitt – during proceedings in San Bernardino Superior Court.

The four men have been charged with multiple felonies, including conspiracy and conflict of interest stemming from the county’s landmark $102 million settlement with Colonies Partners in November 2006.

The documents sought from the Safety Employees Benefit Association, or SEBA, include voter guides and other records that defense attorneys believe show the union’s support for Measure P – a ballot initiative aimed at bringing term limits and pay raises to county supervisors.

Defense lawyers want the SEBA documents so they can refute Grand Jury testimony, which alleged that Burum influenced Biane to support the lawsuit settlement by creating a campaign to oppose Biane’s Measure P initiative.

At the time, Erwin was the president of SEBA. Erwin’s attorney, Rajan Maline, said Friday that SEBA’s support for Measure P was never in question.

“We want those records to show the unwavering support for Measure P,” Maline said later, outside of court.

In Burum’s lawsuit against the county, he alleged the county abandoned its 70-year-old flood control easements on property owned by Colonies Partners’, a consortium of 22 investors who paid into the 434-acre residential and commercial development in Upland. Burum argued that the county forced Colonies to pay for a 67-acre flood control basin that should be the county’s responsiblity.

Prosecutors allege Burum and the three other defendants conspired together for the county to settle the lawsuit for $102 million. They allege the settlement was tainted by blackmail and bribery.

Among the allegations: Burum, in late 2006, bankrolled a campaign against Biane’s Measure P that would limit term limits for supervisors to three and increase their salaries by roughly 50 percent.

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Supervisors will take up an agreement Tuesday to provide raises to nurses at the Riverside County Regional Medical Center in Moreno Valley.(FILE PHOTO/2008)

BY DUANE W. GANG
STAFF WRITER
dgang@pe.com

Published: 06 January 2012 06:01 PM

In an effort to make Riverside County Regional Medical Center nursing pay more competitive, supervisors Tuesday will take up a deal to provide the hospital’s nurses with significant raises.

The raises — totaling more than 8 percent — would cost the county hospital $3.2 million this year, but two supervisors said the pay boost is needed to keep nurses from jumping to the private sector.

“This is good for our hospital,” Supervisor Marion Ashley said. “This is also very good for our patients.”

The nurses are represented by the Service Employees International Union Local 721. Last year, county officials imposed pension changes on the union, which represents 5,800 employees, including about 860 nurses.

Employees will be required to pay more toward their own retirements and, in exchange, will get a 2.71 percent pay increase.

But some supervisors and the nurses themselves have long raised concerns about a pay disparity with the private sector. The county often trains nurses and gives them experience, only to see them leave for higher paying jobs elsewhere, they said.

That results in continuity problems, loss of institutional knowledge and an increased reliance on higher-cost registry nurses, Ashley and Supervisor Jeff Stone said this week.

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BY DUANE W. GANG
STAFF WRITER
dgang@pe.com

Published: 31 December 2011 05:04 PM

Changes in public employee retirement were a hot-button issue in 2011 and will likely continue this year as a dominant policy debate at the state and local levels.

Gov. Jerry Brown late last year proposed a 12-point pension overhaul plan that includes increased retirement ages and employee contributions. He has been trying to rally support among skeptical majority Democrats in the Legislature.

In addition, a group called California Pension Reform is pushing proposed ballot initiatives seeking more sweeping changes to public employee retirements.

At the same time, local governments throughout the Inland region also are seeking changes in the pension plans for current and future employees.

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